Jun 21, 2004
SUMMARY: Your business marketing collateral (brochures, website content, etc.) has to appeal to two very different sets of prospects -- transactional versus consultative seekers.
We interviewed expert Neil Rackham who's helped IBM, Xerox, AT&T, and Citicorp improve their marketing collateral and the way the sales force used it.
His notes on how to copywrite for the three phases of the prospect's buying cycle are really useful. Plus, his comment that sales reps often "snatch confusion from the jaws of clarity" made us laugh. Enjoy.
"It used to be that the most successful organizations had a value proposition that was: We'll give you a slightly better product or service and charge you slightly more for it," says Neil Rackham, author and internationally known consultant for sales forces at companies such as IBM, Xerox, AT&T, and Citicorp.
That doesn't work anymore, he says. Today, there are two different kinds of customers looking for value in different ways: transactional vs. consultative customers.
Rackham explained to us how you can create collateral materials for each type:
Marketing to transactional customers
"The transactional customer is only concerned with cost and ease of doing business," Rackham says. "They're the ones who will see your product as pretty well substitutable with anyone else's product." With these more 'simple' sales, the customer knows the problem and the solution, and is looking for the best deal.
"I want to buy 17 laptops and I want them to have a Pentium III processor and I want them to have these characteristics. What's your price?" Rackham explains.
With transactional sales, the sales force doesn't contribute much value, because the sale is based on a product that already exists.
"A standard off-the-shelf software package doesn't need a sales person," says Rackham. In fact, sales channels for these products are moving toward call centers and the Internet. It's the marketing collateral -- brochures, Web copy, catalogs -- that shows the value of the product.
Marketing to consultative customers
A consultative transaction is more complex: the customer has a problem but doesn't know the solution. The sales force must show the value of the product to the customer. "The role of marketing here is very different," says Rackham.
You can't produce collateral material in a traditional way on consultative sales. "Products tend to be customized so standard brochures work against you," Rackham says. "What marketing can do is understand that most of the value lies in how the sales person uses the product to solve the customer's problem."
Every major sale goes through three distinct phases from a customer's point of view. In each phase, marketing materials that support the sales force's efforts should change. For example:
o Phase one: "Do I have a problem?"
Here, the customer is considering whether changes should be made. They're saying, in essence, "I think I might have a problem. I don't really have good data on my customers and I'm wondering if I ought to do something about it," Rackham says.
In this case, a brochure on a CRM system won't help. Instead, offer analytical tools that show the customer how big the problem is. For example:
--benchmarks on what other companies in the same industry are doing, ie: 78% of companies have implemented some sort of CRM system
--10 questions to ask to see if you have a CRM problem
--data on what it's costing the company to have a CRM problem
o Phase two: "Who can solve my problem?"
By now, the customer has decided they have a problem that needs attention and is struggling to find criteria to help choose a product or service.
"At a macro level, offer ways to help customers think about how to make the decision," Rackham says. For example, IBM has been very successful producing collateral materials that help customers who have never bought a major enterprise system set criteria for how to judge systems acquisitions.
"Collateral is provided not to help them look at the product the way a brochure would," he says. "It's not interesting to a customer to know it's green and seventeen inches long," They want to know how the product compares, what it will cost to own it, what it will cost to maintain it.
Collateral material might include:
--quantified data showing cost of ownership
--analysis of your performance vs. a competitor's performance
--criteria that show how successful companies make purchasing decisions for products like yours
--steps on how to assess best performance
o Phase three: "But what if…?"
The third phase is based on fear. Customers wonder: what if the product doesn't perform, what if something goes wrong, what risks am I taking?
Marketing tools should minimize risk in the mind of the customer, and case studies can be very powerful tools. "Show what you do that makes implementation successful," Rackham suggests, such as a case study that illustrates how you manage to install your product without disrupting the workflow.
Testimonials also minimize perceived risk in this phase.
How to get the sales force to use marketing materials properly
"Sales people have a phenomenal capability of snatching confusion from the jaws of clarity," Rackham says. "You may believe you have created very clear tools, but the evidence is that sales people will be highly confused."
To keep this from happening, he suggests two techniques:
o Technique #1. Go on sales calls
Introduce your tools by working through an actual major sale with the sales team.
"Have a direct involvement with selling, almost in an apprenticeship way," he says. This helps the sales team understand how to use the tools, and helps you to know which tools work better than others.
With transactional sales, marketers don't particularly need to go out in the field -- you can get a picture of the market by surveys and other research. But in a consultative sale it's very much "one-on-one, so the best marketing departments are actively involved with sales to get close to the customer."
o Technique #2. A "solemn vow"
The relationship between sales and marketing is relatively uneasy these days, Rackham says. "Too many marketing people sit in an ivory tower when it comes to tools. They provide wonderfully analytical and beautiful PowerPoints, none of which mean much to sales or customers."
Without an understanding between sales and marketing, it may be difficult to get the sales force's buy-in to allow marketing to go on sales calls.
"A lot of companies right now are experimenting with new ways to put sales and marketing together, and the first step is that the most senior group in sales and marketing have to get together and make a solemn vow that they're going to be on the same page," says Rackham. "If they start there, there is hope."
Don't ask sales to gather information from the field and report back: reporting and the filling out of forms take time away from the business of selling. Rather, position marketing as a means to provide the sales team with the tools to help them succeed.
"Top sales managers are feeling that the only people selling are the rock-star sales people, and nobody knows how they're doing it. The answer is that marketing works with them to provide tools to allow ordinary mortals to succeed."